Wamama48 - I am very sorry for your situation. I have a young child and I'm currently divorcing my AH. I know that you are asking for advice from people who've spoken to their kids and I am not one of those people, simply because he's still too young.
That said, what is the harm in being honest with your children? At 16 and 12, I wouldn't doubt they already know something is wrong. It would probably provide them with a lot of relief if that "something" was finally addressed as alcoholism and the pretending stopped.
Tell them that because of dad's alcoholism (which has gone on for x years), mom needs her space even, though he's not drinking anymore. It has nothing to do with them and that sometimes relationships need time outs...
It teaches them that they are also entitled to take a "time out" from people that hurt them if they need to and that is OK. You are teaching them about boundaries which is a vital life lesson for healthy relationships.
They're watching you and your husband and learning how to navigate life. Talk to them, honestly. I wouldn't doubt that they probably want so badly for someone to address the elephant. Lying and pretending everything is OK, is part of the alcoholic family cycle and its horribly damaging.